Correlation Between Seneca Foods and John B

Can any of the company-specific risk be diversified away by investing in both Seneca Foods and John B at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Seneca Foods and John B into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seneca Foods Corp and John B Sanfilippo, you can compare the effects of market volatilities on Seneca Foods and John B and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Seneca Foods with a short position of John B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and John B.

Diversification Opportunities for Seneca Foods and John B

-0.03

Correlation Coefficient

Seneca Foods  John B

Good diversification

The 3 months correlation between Seneca and John is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and John B Sanfilippo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John B Sanfilippo and Seneca Foods is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Seneca Foods Corp are associated (or correlated) with John B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John B Sanfilippo has no effect on the direction of Seneca Foods i.e., Seneca Foods and John B go up and down completely randomly.

Pair Corralation between Seneca Foods and John B

Assuming the 90 days horizon Seneca Foods Corp is expected to generate 1.47 times more return on investment than John B. However, Seneca Foods is 1.47 times more volatile than John B Sanfilippo. It trades about 0.08 of its potential returns per unit of risk. John B Sanfilippo is currently generating about -0.08 per unit of risk. If you would invest  5,970  in Seneca Foods Corp on August 10, 2024 and sell it today you would earn a total of  330.00  from holding Seneca Foods Corp or generate 5.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.09%
Values	Daily Returns

Seneca Foods Corp  vs.  John B Sanfilippo

Seneca Foods Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Seneca Foods Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile technical and fundamental indicators, Seneca Foods sustained solid returns over the last few months and may actually be approaching a breakup point.

John B Sanfilippo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John B Sanfilippo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Seneca Foods and John B

The main advantage of trading using opposite Seneca Foods and John B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, John B can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in John B will offset losses from the drop in John B's long position.

The idea behind Seneca Foods Corp and John B Sanfilippo pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.